Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/288266 
Year of Publication: 
2023
Citation: 
[Journal:] Economica [ISSN:] 1468-0335 [Volume:] 91 [Issue:] 361 [Publisher:] Wiley [Place:] Hoboken, NJ [Year:] 2023 [Pages:] 93-122
Publisher: 
Wiley, Hoboken, NJ
Abstract: 
Passenger transport has significant externalities, including carbon emissions and air pollution. Public health research has identified additional social gains from active travel, due to the health benefits of physical exercise. Per mile, these benefits greatly exceed the external costs from car use. We introduce active travel into an optimal fuel taxation model and characterize analytically the second‐best optimal fuel tax. We find that accounting for active travel benefits increases the optimal fuel tax by 44% in the USA and 38% in the UK. Fuel taxes should be implemented jointly with other policies aimed at increasing the uptake of active travel.
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article
Document Version: 
Published Version

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